Interim Financial Statements and Dividend Announcement

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Multi-Chem Limited Registration No. 198500318Z Interim Financial Statements and Dividend Announcement For the financial period from 1 January 2013 to 31 March 2013 PROFIT BEFORE TAX (“PBT”) The Group registered a loss before tax of $124,000 in 1Q2013, as compared to PBT of $3.5m in 1Q2012. The loss before tax in 1Q2013 was due to the following:- (1) Gross profit margin decreased by 1.3 percentage points from 19.3% in 1Q2012 to 18.0% in 1Q2013 mainly due to the decrease in turnover in the high operating leverage Manufacturing Services Division. Given the high depreciation cost of laser and mechanical drilling machines, gross margin is particularly sensitive to changes in production volumes. The increase in depreciation cost from $1.3m in 1Q2012 to $1.6m in 1Q2013 is mainly due to the strengthening of Chinese renminbi whereby the majority of the Group’s assets are located. ; (2) An increase in interest expense from $61,000 in 1Q2012 to $91,000 in 1Q2013 due to drawdown of short term loans; (3) Net foreign exchange gain of $490,000 in 1Q2013 as compared to net foreign exchange gain of $830,000 in 1Q2012 due to strengthening of USD in 1Q2013; (4) Loss on disposal of plant and equipment of $30,000 in 1Q2013 as compare to gain on disposal of plant and equipment of $503,000 in 1Q2012. The decrease in PBT was ameliorated by the following: (1) A write-back of impairment of $107,000 in plant and equipment in 1Q2013 when related machinery was sold above the carrying amounts, but there were no such write-back in 1Q2012; (2) An increase in interest income of $106,000 from $96,000 in 1Q2012 to $202,000 in 1Q2013 which was due mainly to additional funds in China placed in fixed deposits; (3) A decrease in allowance for doubtful third parties trade receivables of $257,000 from $407,000 in 1Q2012 to $150,000 in 1Q2013. Comparing 1Q2013 to 4Q2012, the Group registered a loss of $124,000 in 1Q2013 as compared to PBT of $743,000 in 4Q2012 due to higher revenue achieved in 4Q2012. Multi-Chem Limited, Page 12 of 22
Multi-Chem Limited Registration No. 198500318Z Interim Financial Statements and Dividend Announcement For the financial period from 1 January 2013 to 31 March 2013 PROFIT AFTER TAX (“PAT”) Group PAT decreased by 145.8%, from profit of $2.4m in 1Q2012 to a loss of $1.1m in 1Q2013. Comparing 1Q2013 to 4Q2012, net profit after tax decreased by $1.2m from profit of $78,000 in 4Q2012 to loss of $1.1m in 1Q2013. These were largely in line with the changes in Group PBT. Provision for tax comprised mainly of current income tax and deferred tax of the Company and its subsidiaries. Income tax expense of $1.0m comprised of withholding tax of $321,000 paid for dividends declared by the subsidiaries in 1Q2013. Multi-Chem Limited, Page 13 of 22
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Interim Financial Statements and Dividend Announcement

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